ALEX BRUMMER: Foul play in the Sports Direct boardroom shines a bad light on capitalism

Predictably Mike Ashley has sought to draw the fire of his Parliamentary and City critics with the promise of social, welfare and pay reforms at the now notorious Shirebrook warehouse in Derbyshire.

Sports Direct's contrite deputy chairman, 55 per cent shareholder and champion of cheap and cheerful sports goods on the High Street is expressing his 'regret' and holding out the promise of corporate governance reforms to go with it.

Ashley's timing is impeccable coming as it does on the eve of today's annual general meeting. It seems unlikely that he has done enough, however, to save the skin of chairman and former drug czar Keith Hellawell.

Mike Ashley has sought to draw the fire of his Parliamentary and City critics with the promise of social, welfare and pay reforms at the now notorious Shirebrook warehouse in Derbyshire

The sharp criticisms in the legal report commissioned by Ashley also suggests his long-time associate and chief executive Dan Forsey ought to be out on his ear as well as the nodding-dog independent directors.

The real issue at Sports Direct is the unfortunate light it shines on capitalism. As a publicly listed company, Sports Direct has betrayed not just its employees and agency workers at Shirebrook but its shareholders, suppliers and customers.

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The main concern of the latter may be value for money but the slump in turnover in the last year, up 2.5 per cent last year against 23.8 per cent two years earlier, and gains made by rival JD Sports tells their own story.

We cannot take Sports Direct in isolation. It has been a ghastly year for business, not helped by the sight of Sir Philip Green patrolling the deck of the Lionheart in the Aegean Sea as the last BHS stores closed.

Now we learn that in breach of general standards of privacy, the email addresses of BHS customers have quietly been passed on to Qatari investors as part of a package deal brokered by the liquidator which involved some stores and international franchise operations.

All of these shenanigans come against a background of egregious greed and weak pay controls in most of the FTSE 100.

The pay multiple between those at the top and those in the workforce stood at an astonishing 129 to one in 2015.

It is encouraging that Theresa May has given voice to some of these concerns. But there are serious questions as to whether the UK has watchdogs with enough bite.

The Financial Reporting Council is seeking to sharpen up its act after some abject enforcement performances, as recently seen in relation to the PwC audit of sub-prime lender Cattles.

We have been promised an expedited report from the Insolvency Service on the failure of BHS. But it is not clear that it really has the resources and skills to do that.

An alternative, the Companies Act inspection, provide great forensic examinations of what went wrong in the boardroom.

But they have become discredited because of the huge time they take to produce a process lengthened by Maxwellisation – the right of those in the frame to be given a preview of the criticisms.

The most sensible reform May could bring to the boardroom is the creation of an agency charged with enforcing better governance, improved auditing and with sweeping powers to conduct faster probes. Speeding up the process can be done, as past investigations into banking failures at Barings and BCCI demonstrated. But it needs willpower and commitment.

Until there is a regulator that gives pause to those who abuse their position in the boardroom Mike Ashley and his ilk will feel free to test the limits of ethical behaviour.

Regrettably, although big battalion investors are now rippling their muscles at Sports Direct, much of the damage already has been done.

Shareholders must now insist that the report by Sports Direct's lawyers RPC is at the very least peer reviewed to make sure all the relevant documents were provided.

Professionals with their own fees at stake have a habit of pulling the punches. The further review of corporate governance should not be carried out by RPC, but at arms-length and be a matter of urgency. A muddle through approach with a time span of up to a year is unacceptable.

Happy clappy

SoftBank chairman and chief executive Masayoshi Son, together with ARM boss Simon Segars, clearly felt it was time to apply a little balm to the ARM workforce after the Japanese delegation mugged Theresa May at the G20 summit over Brexit.

In a note to employees the two chieftains say the merged companies can look forward to a 'more exciting future together' and will have the collective vision to be part of an information revolution (whatever that may be) that 'brings happiness to everyone'. I wonder what Michael Woodford, the former chief executive and whistleblower at Japanese tech-champion Olympus, would make of all that.

Shriti's return

Former adviser, minister and Labour hero of the credit crunch Shriti Vadera, now chairman of Santander UK, will be back in the Treasury today leading a column of financial bigwigs as they bend the ear of the Chancellor Philip Hammond on what the City wants from Brexit.

There is no mistaking Vadera's personal views. At a recent social event, the feisty Baroness was urging anyone who would listen to lobby in favour of staying in the single market. Anything else would be a disaster.